Card Check Creates Government-Run Workplaces

The misnamed Employee Free Choice Act (EFCA) does more than
effectively eliminate workers' rights to a secret ballot vote on
joining a union. Section 3 of EFCA gives government officials the
power to impose contracts on workers and firms. Government
bureaucrats would set compensation and make most major business
decisions at newly unionized companies. The bureaucrats writing
these proposals would have no expertise in the company's operations
or business model and would be unaccountable if their decisions
drove the company into bankruptcy. Workers would lose all say over
working conditions. EFCA would effectively create government-run
workplaces.

Mutual Consent and Good Faith
Bargaining

Mutual consent and good faith negotiating form the foundation of
the collective bargaining process: The parties negotiate in good
faith until they settle on terms. If both sides cannot reach an
agreement, the union may call a strike and the employer may
implement its last offer or even lock out workers. Both sides use
their bargaining power to win concessions, but neither side must
accept terms that they find unacceptable. Section 8(d) of the
National Labor Relations Act specifies that the law "does not
compel either party to agree to a proposal or require the making of
a concession."

The end result is a contract that both sides can live with, even
if they would have preferred different terms. No contract takes
effect unless workers believe they get a fair deal and management
believes the contract will not bankrupt the firm. If negotiations
break down, the workers can strike or management can lock them out,
but neither side must work under an unsatisfactory contract.

EFCA Imposes Contracts

EFCA replaces good faith bargaining with government imposed
contracts. Under Section 3 of the act (misleadingly titled
"Facilitating Initial Collective Bargaining Agreements"), EFCA
provides that-after unions organize a business-the company has 10
days to meet with union officials to begin collective bargaining.
After 90 days of bargaining, either party may request mediation by
the Federal Mediation and Conciliation Service (FMCS). Thirty days
later, if the parties have not settled on a contract or agreed to
extend negotiations, the FMCS

shall refer the dispute to an arbitration board
established in accordance with such regulations as may be
prescribed by the Service. The arbitration panel shall render a
decision settling the dispute and such decision shall be binding
upon the parties for a period of two years, unless amended during
such period by written consent of the parties.[1]

This government-imposed arbitration radically departs from the
foundation of the collective bargaining process: the principle of
mutual consent. In place of the agreement of both parties,
government arbitrators would simply impose working conditions on
both employers and employees, whether such conditions are workable
or not.

Bureaucrats Dictate Workplace
Conditions

In practice, EFCA will effectively eliminate good faith
bargaining for initial contracts because the system provides no
reason for unions not to hold out for a government contract. Unions
would have strong incentives to make extreme demands and hope the
arbitrator splits the difference between these demands and
management's position.[2]

Granting such a radical amount of power to an arbitrator puts
control of workplaces in the hands of unaccountable government
bureaucrats. Labor contracts do not simply set wage and benefit
levels but cover many aspects of how businesses operate. Under EFCA
government bureaucrats would dictate:

The government would decide how many employees a firm hired, how
much it paid them, how it promotes them, and what retirement and
health benefits they receive.

Additionally, the government would also be empowered to make
critical decisions regarding business operations. Any business
operation that significantly affects workers' jobs or working
conditions would be set by arbitrators-even the equipment employees
use.[4]
The government would determine what tasks a firm subcontracts out
for and what work gets performed in-house. It would even decide
whether businesses could merge or whether they could relocate
operations. Government bureaucrats would set most major business
decisions for newly organized businesses for two years. Given the
power the government would now wield over the private sector, EFCA
effectively allows the government to run newly organized
workplaces.

Unaccountable for Mistakes

Government arbitrators do not have expertise in the business
whose operations they will dictate. Instead, they will prescribe
the terms and conditions of employment to employees and employers
without having any practical experience in the company, its
operations, or its business strategy. The EFCA gives arbitrators
sole discretion in imposing contracts with no risk that their
rulings will be overturned. And unlike employees and employers,
these arbitrators will not be affected by the consequences of their
decisions.

Competition means that if an arbitrator miscalculates and forces
a company to adopt uncompetitive business procedures, that same
company cannot raise its prices to compensate without the risk of
losing customers. A poor decision could easily lead to bankruptcy
and layoffs. Yet arbitrators face no penalty if a miscalculation
costs workers their jobs. Government-imposed contracts have all the
downsides of bureaucratic central planning without the benefit of a
coherent central plan.

Workers Have No Say

Under current law, workers can vote down a contract they do not
support. Workers also have the right to honor a strike or to
refrain from striking. All of these rights give workers some degree
of autonomy and control over the union and their workplace.

With imposed contracts in place, however, these rights
disappear. EFCA does not allow workers to terminate the binding
arbitration process. No matter how long arbitration drags on, the
workers will remain stuck with it. And an arbitrator's word will be
final, so a vote to reject the contract is out of the question.
With a government-imposed contract, workers would lose all say in
the workplace. They could not even ask their supervisors for a
raise for good performance beyond what the contract specified. EFCA
deprives workers of all choice regarding employment issues.

Putting the Government in Charge

EFCA does more than take away workers rights to vote in privacy.
It also gives control of the workplace to government bureaucrats.
Government officials would write the collective bargaining
agreements of most newly organized companies. The government would
set not just wages and benefits but all business operations that
significantly affect workers, such as promotion procedures,
retirement plans, health benefits, subcontracting, mergers, work
assignments, even the machines used to run a plant. Employers would
lose the ability to pursue their business strategies, and workers
would lose all say about their workplace for two years. EFCA
effectively constitutes a government takeover of America's
workplaces.

James Sherk is the
Bradley Fellow in Labor Policy at The Heritage Foundation.

[4]Ibid., p. 225. Employers may not change
business operations if that decision significantly affects the jobs
of workers at the company without modifications to a collective
bargaining agreement. Courts have determined that changing the type
of machinery businesses use is such a change in business
operations.

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